Question 1 Lemon, Lime, and Orange, three cash method, calendar year individuals, form Starburst General Partnership...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Question 1 Lemon, Lime, and Orange, three cash method, calendar year individuals, form Starburst General Partnership to create fruit candies. Before forming this partnership, they each had their own sole proprietorship. The partners contribute the following property (in each case worth $600 net of liabilities) in exchange for equal 1/3 interests in the partnership's capital, profits and losses (see the table below of property contributed by each partner). The partnership assumes all liabilities encumbering the contributed assets. Assume that the partners are responsible for an equal share of the partnership's liabilities. What is the most that any specific partner recognizes on these transactions? • Lemon contributes land with a fair market value of $1,290, which is encumbered by a recourse mortgage of $810. Lemon has held the land for several years as an investment, and his basis in the land is $300. Lemon also contributes $120 in cash. Lime contributes a building, a § 1231 asset, with a value of $780 in which Lime has an adjusted basis of $390. The building was purchased several years ago by Lime and is subject to a recourse mortgage $180. • Orange contributes zero basis accounts receivable from his business worth $1,050 and assigns his accounts payable of $450 to the partnership. $60 1 pts $300 O $180 O $0 Question 1 Lemon, Lime, and Orange, three cash method, calendar year individuals, form Starburst General Partnership to create fruit candies. Before forming this partnership, they each had their own sole proprietorship. The partners contribute the following property (in each case worth $600 net of liabilities) in exchange for equal 1/3 interests in the partnership's capital, profits and losses (see the table below of property contributed by each partner). The partnership assumes all liabilities encumbering the contributed assets. Assume that the partners are responsible for an equal share of the partnership's liabilities. What is the most that any specific partner recognizes on these transactions? • Lemon contributes land with a fair market value of $1,290, which is encumbered by a recourse mortgage of $810. Lemon has held the land for several years as an investment, and his basis in the land is $300. Lemon also contributes $120 in cash. Lime contributes a building, a § 1231 asset, with a value of $780 in which Lime has an adjusted basis of $390. The building was purchased several years ago by Lime and is subject to a recourse mortgage $180. • Orange contributes zero basis accounts receivable from his business worth $1,050 and assigns his accounts payable of $450 to the partnership. $60 1 pts $300 O $180 O $0
Expert Answer:
Answer rating: 100% (QA)
The detailed answer for the above question is provided below s... View the full answer
Related Book For
South Western Federal Taxation 2015 Essentials of Taxation Individuals and Business Entities
ISBN: 9781285438290
18th edition
Authors: James Smith, William Raabe, David Maloney, James Young
Posted Date:
Students also viewed these accounting questions
-
An individual contributes property with a fair market value in excess of basis to a corporation in exchange for stock. What is the basis of the stock in the hands of the shareholder, and what is the...
-
A printing press priced at a fair market value of $300,000 is acquired in a transaction that has commercial substance by trading in a similar press and paying cash for the difference between the...
-
A printing press priced at a fair market value of $400,000 is acquired in a transaction that has commercial substance by trading in a similar press and paying cash for the difference between the...
-
What is path dependence? Explain the concept using your own words and provide an example of path dependence (other than what we have already mentioned in class). List the 4 categories of innovation,...
-
Dave Elliott, CPA, is an assistant to the controller of Lyric Consulting Co. In his spare time, Dave also prepares tax returns and performs general accounting services for clients. Frequently, Dave...
-
Is this reaction a redox reaction? Explain your answer. 2NaCl(aq) + Pb(NO3)2(aq) ( 2NaNO3(aq) + PbCl2(s)
-
Graham Inc. acquired all of the outstanding shares of Mahoney Inc. through an exchange of common shares. The aggregate fair value of the Graham shares distributed to the Mahoney shareholders was...
-
Bill Alexander and his wife Valerie are both employed. Bill will have an adjusted gross income this year of $70,000. Valerie has an adjusted gross income of $2000 a month. Bill and Valerie have...
-
A supplier to Home Depot has fixed expenses of $352,000, and a unit sales price of $155. Their variable cost per unit is $107. If they sell 9000 units their operating income is a loss of $90,000 gain...
-
The Shop at Home Network sells various household goods during live television broadcasts. The company owns several warehouses to hold many of the goods it sells, but also leases extra warehouse space...
-
a researcher's study has the characteristics listed below. the researcher is interested in examining the differences between groups of the independent variable on the dependent variable. the...
-
This module discuss important financial reporting issues; accounting estimations and valuations for various operating activities. For example, they discuss in-depth implication of revenue...
-
Can you elaborate on the distinction between diversity as a representation of differences within a workforce and inclusion as the active engagement and empowerment of diverse voices and perspectives,...
-
demonstrate your understanding of the various types of managed care organizations and their leadership. comparative analysis of different managed care organizations and their leadership models. This...
-
1. Provide an overview of the HSBC British multinational bank (from the accounting, finance and financial services sector) and their product/service - this information must come directly from the...
-
Elaborate on some of the challenges that a project manager might face when using MS Project software to control a project.
-
What is the Popular Front? OA. The Popular Front was an alliance of leftist organizations committed to pacifism and non- violent support of the Soviet Union. OB. The Popular Front is an organization...
-
Before the latest financial crisis and recession, when was the largest recession of the past 50 years, and what was the cumulative loss in output over the course of the slowdown?
-
You saw on the online Business News Channel that YoungCo has released one-third of its valuation allowances because of an upbeat forecast for sales of its tablet computers over the next 30 months....
-
Mason owns and operates a pharmacy as a sole proprietor. He manages to compete with the national chains because of the personalized service he provides to his customers. Mason also maintains a large...
-
Penguin Corporation (a cash basis, calendar year taxpayer) recorded the following income and expenses in the current year. Income from services ............... $400,000 Salaries paid to employees...
-
The Washington Company owns no plant assets and had the following income statement for the year: Additional information about the company includes: Use the preceding information to calculate the cash...
-
The Azuza Company owns no plant assets and had the following income statement for the year: Additional information about the company includes: Use the preceding information to calculate the cash flow...
-
Use the following information regarding the Hamilton Corporation to prepare a statement of cash flows using the indirect method: Accounts payable decrease. Accounts receivable increase. Wages payable...
Study smarter with the SolutionInn App